5 Things that Need to Happen for $2,000 Gold and $50 Silver

The credibility of those who predict gold going to $5,000 and beyond as predictably as day follows night is deteriorating – at least in the gnat-like attention spans of The Masses. It’s coming up on 3 years since gold departed from its upward trajectory after touching an intraday high of $1,923.70 on September 6, 2011. Since then it’s been as low as $1,179 an ounce, but only as a result of combined downward price manipulation by Goldman Sachs’ Jeff Currie and the Wall Street Journal acting in concert with various United States Dollar interests.

The utter canard and foofooraw of the ersatz prosecution of manipulators of the gold price fix process was a laughably obvious attempt to convince the ill-informed that all the manipulation in the gold market that conspiracy theorists have been shrieking about was involving the gold price fix, which it is not.

If anything, astute observers of pattern recognition will have appreciated further confirmation of the concept of global gold price manipulation through futures markets in the interests of maintaining the illusion that the United States dollar is a viable currency. It’s only a conspiracy until broad public acknowledgement of its actual existence becomes the reality, and with every fabricated U.S. dollar, the future of the world’s leading fiat currency dims in direct proportion to the rate at which gold and silver’s brightens.

While in the current climate of surging Dow Jones, NASDAQ and S&P 500 indices this opinion will be predictably scorned, it nonetheless remains a shining beacon of truth in the future that the manipulation of gold prices are a fundamental component in the ability of the United States to fabricate demand for its debt. But lets not dwell on the future – let’s live in the moment, shall we?

Without further ado, these are the 5 major geo-pilitical-economic events that must unfold before we can once and for all leave $1,300 gold disappearing into a speck on the horizon of our historical rear-view mirror:

1. The futures market must fail.

There are several ways for this to happen, and essentially entails the abandonment of all participants in the futures market as a result of a collapse in confidence of the future price of gold as quoted by the markets participants.

There has been a near-perennial prediction circulating that COMEX will at some point, fail to deliver physical gold in settlement of contracts for which physical gold is demanded. Such an event would certainly catalyze an event equivalent to the bursting of the Hoover Dam for gold and silver prices, as it would essentially point to the veracity of what up to that point would be considered ‘that conspiracy theory”.

How does the futures market continue? One must surmise that those demanding settlement of contracts in physical gold are being dissuaded from their insistence by the payment of some kind of premium to go away. This would be facilitated by the massive counterfeiting operation run by the U.S. government called Quantitative Easing. Or Cheque Kiting. What would you call it when the buyers of your debt is 20-40% yourself and your affiliates?

2. Quantitative Counterfeiting Easing must end.

Ahh…the most abundantly visible and glaring proof that the entire world monetary system is predicated on the predation of the minority upon the majority. The government writing cheques to itself. And then, compounding the thus counterfeited capital through the process of fractional banking, wherein any institution lucky enough to have a seat at the table is allowed to lend out the bogus debt instrument it buys from the U.S. Fraudulent Reserver at up to 12 times, handily permitting the printing press to offset losses incurred by Off Balance Sheet entities that absorb the mathematical losses incurred in running the futures market gold price manipulation. Theoretically, that’s supposed be happening this year by October.

3. The U.S. stock markets must experience another 2008-style rout.

That’s not quite as distant a possibility as it might seem in this most exuberant market July. But keep in mind, these all time highs are being purchased with fabricated currency in which all confidence is derived from coercion, collusion and fraud. Small cracks appearing at the base of the global financial system (Portugal, Austria, China et al) portend potentially much bigger systemic difficulties ahead. There are all kinds of distortions skewing world markets right now as a result of so much capital fabrication, and both within the U.S. market and without, odd and unexpected threats have materialized.

After the last massive melt-down – not really so distant in recent memory – it wouldn’t take much to launch a complete rout.

4. Interest Rates Must Rise

So you’re sitting at a tulip auction, and the auction’s biggest buyer, who has also been its biggest seller in recent memory, suddenly stops buying and starts selling the massive inventory that has been built up for the last 4 years. Suddenly, not only are tulip prices falling, but the buyers of tulips suddenly demand to be paid more to buy the tulips from the largest tulip vendor. If it were, in fact, just tulips, the market would collapse and nobody would want tulips until the inventory had cleared out.

Since in this case tulips are a metaphor for U.S. Treasury Bonds, and since these bonds enjoy the otherwise impossible perception as liabilities worth buying under the guise of investment, the vendor must pay buyers of their liabilities interest to induce their participation. When the seller who is the biggest buyer suddenly flips into seller exclusively, and begins to unload the vast inventory on its balance sheet, at what rate will investors/idiots holding the bonds need to be paid to continue the delusion? How long is it before the seller must become a buyer again in substantially larger volumes just to pay the extra vig it now must pay? How soon until even the investors/analysts/idiots in the world’s largest circle jerk/cheque kiting/counterfeiting scheme have to admit that its all just a massive Ponzi scheme with zero mathematical rationale and thus, the equivalent of a giant financial nuclear bomb?

Warren Buffett called securitized debt obligations weapons of mass financial destruction. He was somewhat accurate. But they are nothing compared to what the U.S. dollar is doing to the global financial system as we speak.

I know, I know…conspiracy theory, right? Stay tuned.

5. China must begin to dump its U.S. Debt holdings

That will be the nail in the coffin. The spark that lights the fire.

China currently holds >$1.2 trillion in U.S. debt. It’s the main reason why the U.S. looks the other way when China’s massive and daily abuse of its own citizens’ human rights are concerned. It’s why China is so aggressive with its neighbours. It’s why China is the biggest threat to western interests politically, militarily and economically.

The unwritten agreement states that China will continue to purchase and hold U.S. debt as long as the U.S. in turn does not impose its democratic agenda on China, or interfere with China’s hegemonic ambitions. Until such time as it is no longer in China’s interest to coddle its American beggar, the those conditions are more or less uniformly observed.

However, when the interests of China begin to diverge from those of its largest borrower, the powerful economic hand held by China will be played against the United States, the U.S. dollar will collapse, interest rates will soar, Quantitative Counterfeiting Easing will end or almost end before the market’s nosedive reverses the Fed’s course, and they can’t build printing presses fast enough.

Overall, with expanding population, diminishing resources, spreading conflicts, increasingly catastrophic weather patterns, decreasing ocean output, and accelerating greenhouse gas emissions, the future for humanity is a little bit dark, to say the least. Which is absolutely great for gold.

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
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